This article explains about social insurance options for workers who left companies.
First, let’s look at health insurance. Workers can choose from three options after leaving their jobs:
1. National Health Insurance
2. Voluntarily-continued insurance
3. Family member’s insurance (insured as a dependent)
Available systems are different according to the situation of retired workers or their families. Amounts of premiums also vary depending on individual insurance programs.
1. National Health Insurance
The National Health Insurance system is run by municipal governments for people who are not covered by other insurance programs. The amount of premium is determined based on the number of household members and a person’s income in the preceding year.
Since the calculation method is different among municipalities, companies cannot provide a premium amount. Workers should ask the municipality where their address is registered by providing the income figure stated in their withholding receipts of the previous year.
2. Voluntarily-continued insurance
This is a system to allow workers to keep insurance enrollment for a certain period after leaving a company. To apply for this system, a worker
(1) has to be enrolled in the company’s health insurance program for a period of at least two continuous months up to the retirement date (the day before the insurance deregistration date) and;
(2) has to submit the application within 20 days of the next day of the retirement to a branch of the Japan Health Insurance Association that covers the worker’s place of residence.
Once 20 days have passed, the application will not be processed. Companies should emphasize this point when they explain about the system to retiring workers. This system also available in the case of corporate health insurance societies. Please check necessary procedure in advance.
Health insurance premium of voluntarily-continued insurance is twice the amount paid by the worker before retirement with an upper limit. If the standard remuneration at the time of retirement exceeds 300,000 yen, the premium will be calculated by setting the standard remuneration at 300,000 yen (as of March 2024.)
While a worker is employed, the company pays half the amount of insurance premium, but retired individuals have to pay premiums by themselves, hence, twice the amount.
Even after the transition to voluntarily-continued insurance, dependent family members remain covered. There is no additional premium for dependent family members.
3. Family member’s insurance
If a family member is enrolled in a social insurance program at another company, it is possible to become registered as a dependent. There will be no additional premium for the family member or the dependent.
Next, the pension system.
If a retiring worker is aged 20 or older and has not reached 60, the worker is required to submit a change application of the National Pension Program. After leaving a job, the worker becomes “Category I insured” under the Pension Program.
If the worker’s spouse is enrolled in a social insurance program at another company, it is possible to become a dependent, referred to as “Category III insured.” In such case, the spouse’s company is required to submit a change application of the Employees’ Pension Insurance.
Please note that, after a worker leaves a company, the worker’s dependent family members will no longer be the “Category III insured.” They have to submit an application and obtain a status as “Category I insured.”
As explained, procedures of insurance and pension programs when leaving a company are different according to the situation of each individual. Please check necessary steps in advance.
